8 Historical Figures Who Died Broke
8 Historical Figures Who Died Broke

8 Historical Figures Who Died Broke

Larry Holzwarth - November 5, 2017

8 Historical Figures Who Died Broke
James Madison by Gilbert Stuart about 1821. National Gellery of Art

James Madison

Like his neighbor and mentor Thomas Jefferson, James Madison’s personal fortune was tied up in his Shenandoah Valley plantation in Virginia, a property Madison called Montpelier. During Madison’s administration as president, foreign affairs occupied his attention to an extent which exceeded his predecessors, leading him to request and receive from Congress a declaration of war against England. Madison became the first president to run for re-election during wartime and the first to succeed in retaining the presidency under those circumstances, but it led to his attentions being consumed by the peace negotiations which brought the war to an end.

He was then distracted by the rebuilding of burned Washington DC. It all left him little time to devote to his plantation, which by war’s end had lost considerable value. James Madison went home to Montpelier a much less affluent man than he had been when he left. For the rest of his life, the losses mounted. The value of his crops – mostly tobacco – dropped each autumn and he faced taxes on his land and maintenance costs for his extensive holdings, which included up to one hundred slaves at one time. He also faced the poor management practices of his stepson who was tasked with the day-to-day operation of Montpelier.

Madison was forced to reach into his ever-shrinking pockets to pay for errors of judgment and the purchase of equipment that he personally believed unnecessary. A plainly dressed man all of his life, he also faced significant debts over the wardrobe and other items ordered by his somewhat more flamboyant wife, the internationally known Dolley Madison, who had very definite ideas of her station in life and was determined to meet them with style and acclaim.

Madison’s service as the second rector of the University of Virginia – Jefferson had been the first – saddled him with entertainment and other expenses which he was ill-equipped to incur, but obligated by his position to take on. About one year before his death he began selling his slaves to meet operating expenses, as he dealt with financial pressures which reduced him to despair. His health and his faith in the nation he helped to create were both failing by 1834 and he died, nearly destitute, the following year. His widow sold Montpelier in 1842, leasing half of the remaining slaves to the new owner, which provided her with a small income. By 1850 what remained of Montpelier was limited to the main house and its immediate grounds.

8 Historical Figures Who Died Broke
Daniel Drew lost over $13 million after earning most of it through stock manipulation. Wikipedia

Daniel Drew

Daniel Drew was the epitome of the late 19th-century robber baron, a man who built a personal fortune of over $13 million dollars during that income tax-free era. Rising from a position as a lowly saloon keeper, he built his first fortune purchasing cattle herds and having them driven to New York, where higher beef prices could be found. He then entered the steamboat business, taking on Cornelius Vanderbilt in competition for the local market. The cash he generated was soon put to work in the stock market with Drew speculating first as a partner in a brokerage house and later as a sole investor.

With his rising influence and reputation, he became a board member of the Erie Railroad, and his flagrant and remorseless manipulation of the company’s stock led him to make a fortune by partnering with Vanderbilt when the Erie went into bankruptcy. Although allied with Vanderbilt for a time, he soon found himself opposed to the Commodore, and they battled for control of the Erie and the New York and Harlem Railroads.

Drew was for a time allied with James Fisk and Jay Gould, two other robber barons of note, in his war with Vanderbilt. These two eventually conspired against Drew, using the stock prices to drain him of resources, and Drew lost heavily. By the Panic (economic depressions were called Panics until the 1930s) of 1873 Drew lacked the resources to defend his stock positions and by 1876 the man who just a few years before had $13 million at hand was utterly bankrupt over $1 million in debt and with no cash, property, or other viable assets.

Drew soon found that on Wall Street broke is as good as dead. When he had been flush with cash he was touted as a genius and called Uncle Daniel in the press. After bankruptcy, the former millionaire became a symbol of individual greed on the stock market, guilty of victimizing smaller investors. He was roundly condemned in the press. Drew had been generous with his money when he had some, funding churches and schools in several communities, but found it a friendless life being poor. When he died in 1879 he was completely dependent on his son for his support. His estate was virtually nil.